CEO transformational and transactional leadership and organizational innovation: The moderating role of environmental dynamism

Bhaskar Prasad*, Pia Paulina Junni

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Purpose
Organizational innovation is critical for firm competitive advantage. Yet, we do not know enough about the relationship between leadership and organizational innovation. The purpose of this paper is to examine the influence of chief executive officer (CEO) transformational and transactional leadership on organizational innovation. The authors examine the moderating role of environmental dynamism.

Design/methodology/approach
The authors collected survey-based data from top management team members in 163 companies in services, construction, manufacturing and other industries in the USA. The authors used multiple regression analyses to test the study hypotheses.

Findings
The empirical findings indicate that CEO transformational and transactional leadership behaviors positively influence organizational innovation. However, organizations benefit more from transformational leadership in dynamic environments.

Originality/value
This study highlights the role of CEO leadership behavior in the pursuit of organizational innovation. Significantly, the study shows that both transformational and transactional leadership can enhance organizational innovation. However, their effectiveness is contingent on environmental dynamism. This contributes to the firm innovation literature by clarifying how specific types of CEO leadership influence organizational innovation in different environmental conditions.
Original languageEnglish
Peer-reviewed scientific journalManagement Decision
Volume54
Issue number7
Pages (from-to)1542
Number of pages1,568
ISSN0025-1747
DOIs
Publication statusPublished - 15.08.2016
MoE publication typeA1 Journal article - refereed

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